Archive for August, 2010

Some commentary on Are You Supporting Illegals?:

Paulie: No human being is illegal.

Amnesty might be a good start, but truly open borders would be far better.

LibertarianBlue: How so Paulie? They came here illegally

Paulie: Bad laws deserve to be broken.

LibertarianBlue: amnesty is a slap in the face to legal immigrants who went through the process the right way.

Paulie: I’m a “legal” immigrant, and it’s not a slap in my face. It was simply a matter of luck that due to cold war propaganda reasons we were considered “refugees” over people far more deserving of the term. Otherwise I would have grown up in Israel after leaving Russia. I’m glad I didn’t.

LibertarianBlue: I dont disagree that our immigration policy is fucked up with massive amounts of red tape but rewarding those who break the law isnt the way to go.

Paulie: So, change the law and let everyone in.

wolfefan: Wasn’t there an explicit proposal rejected at the time of the Constitutional Convention to make English the official language? There were a lot of people here at the time of the Revolution (many of them my ethnic and religious ancestors in PA) who did not speak English who were nevertheless citizens of the new nation.

Gene Berkman: you are correct that the time the American colonies declared independence from the UK, people spoke many languages. The first report of the Declaration of Independence was published in a German newspaper in Philadelphia.

The situation continued for many years. The first report of the founding of the Republican Party was in a German newspaper in Wisconsin.
The first edition of “Uncle Tom’s Cabin” included on the cover an ad for the German edition of the book (reproduced on the cover the Penguin Classic edition now in print).

It was not until after World War I that the situation changed. Many German newspapers closed during the war, and after the war, the first law restricting immigration was passed, in 1923.

There were of course in the same periods leading to the war newspapers published in other languages as well.

Davi Rodrigues: Unless every social program that is subsidized by US citizens, taxpayers, and residents is FIRST halted, there is no way we can just let everyone in.

Paulie: Nonsense. That’s like saying we can’t end gun control until drugs are legalized, or we can’t legalize drugs until we get rid of welfare and government involvement in medicine, or we can’t end welfare until government is out of the schools….

Truth is, immigrants work harder for less and get less welfare subsidies than those born in the US.

Yes, we should end all those subsidies, for US born or non-US born alike, but it’s not a reason to hold any other freedom hostage.

All our freedoms, all the time.

Tom Knapp: America is, and always has been, a polyglot country.

Less so after WWI, and even less so again after WWII (when the US government put 16 million men under arms and insisted that they learn to take orders in English), but still.

Within 10 minutes of my home in St. Louis, I can walk into places where the predominant language is Spanish. Within 15 minutes’ drive, there are apartment complexes where you’ll hear mostly Urdu. Within 30 minutes drive, whatever it is that Bosnians speak (40,000 Bosnian Muslim immigrants in St. Louis city). Here and there around town, enclaves of people who speak Vietnamese or Mandarin. Within a couple of hours’ drive, Amish who speak mostly (I think) “Low Dutch.”

In larger cities, all of the above (plus Russian, Yiddish, German, etc.), only more so.

English has always been the predominant language, but there’s no particular reason it should be a privileged or government-enforced language.

If we’re going to enforce borders, the one measure I’d like to see implemented is that if you leave the US to work in the District of Columbia, you can’t come back.

P; So….what do you think?


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Jon Stewart continues to investigate the Saudi Money trail behind the “ground zero mosque” and finds a sinister Fox News connection, leading to a debate over whether Fox News is evil or stupid, video at HoT:


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According to Radley Balko at Reason, NYPD says this asshole who claims to be a cop while threatening a citizen reporter with jail rape is actually not one of their employees.

As readers point out:

Well if he isn’t a cop, then isn’t assuming the authority of an officer, threatening people with arrest and ordering people to disperse under that authority illegal in and of itself. I somehow doubt the uniformed officer in the video would be ok with some random drunk impersonating a police officer.


Fine. Who is the uniformed cop who either:

1. Allowed the undercover cop from wherever to threaten people with rape.


2. Allowed a non-cop to impersonate an officer.

I’m not sure I really understand how some random guy is supposedly impersonating a police detective on camera in full view of several uniformed officers on a call. Can anyone help me with that?

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The warfare state and the welfare state are inevitably linked, two sides of the same coin. The elites who run both of these scams have convinced many of those protesting against one to support the other through a false choice between the left and right sides of the same pyramid scheme – with them at the top and most of us at the bottom. As long as our struggles are limited to working to elevate left above right or right above left, the pyramid remains balanced on our backs, ensuring their comfort.

Some people get it: Matt Gonzalez, Ron Paul to Appear Together at Anti-War Rally in San Francisco

Luke Thomas at the Fog-City Journal reports:

Former Board of Supervisors President and (Nader’s) Vice Presidential Candidate Matt Gonzalez, Congressman and former Presidential Candidate Ron Paul, and 8th Congressional District candidate John Dennis (GOP), are scheduled to speak during a non-partisan, antiwar, anti-Washington and anti-incumbency free speech rally, September 4 in San Francisco.

Matt Gonzalez also ran for Mayor of San Francisco as a Green Party nominee. Readers at IPR will also remember Ron Paul was the 1988 Libertarian presidential nominee.

Other speakers are also slated to appear, although they have not yet been named. The event appears to be hosted by Campaign for Liberty and Young Americans for Liberty, both organizations that originated from Paul’s 2008 Republican campaign for President.

Others do not get it at all:
Politics in the Zeros, Antiwar.com and Infoshop News on the effects of Marxist sects on the Anti-war and Pro-immigration movements

Bob Morris in Politics in the Zeros:

Why is the antiwar movement stalled?

In two words: the left

So says Raimondo at Antiwar.com. He is scathing against leftie ideologues who don’t want a right-left coalition to fight against the insane wars of the US because that might cut into their already absurdly small power bases.

The Ron Paul faction of the right as well as the Buchananites oppose the wars too. Does the left want to build little micro-mini-empires or does it want a genuine mass movement to end the wars? Because a real mass movement means people from all across the political spectrum join into together working for a common cause, and ignoring their differences.

A left-right coalition would make the antiwar movement uninhabitable by the inveterate sectarians of the ultra-left, whose only concern is to recruit naïve young people into their dying little sects. Trotskyism, today, is about as relevant as phrenology, and about as useful when it comes to building a mass political movement of any kind – and the sectarians know it. They are essentially parasites who converge on any “peace” movement that arises and suck the juice out of it until they’ve had their fill: then they feast on the bones.

Read more….

In another article at Politics in the Zeros, Morris quotes Infoshop News:

A constant for those of us in Arizona who have been in the streets since the passage of SB 1070, has been the troubling presence of political opportunists, or “the hacks” as we’re now accustomed to calling them. A “31 Flavors” of Left-wing political groups, most of them looking to jump on the anti-SB 1070 band wagon as a means to get their name out there, recruit new members, and/or using the human rights disaster we face to raise funds to build their presence.

For months now, the Trotskyist sect, the Socialist Workers Party (SWP), have shown up at pro-immigrant/anti-Arpaio demonstrations hawking their paper, “The Militant,” and setting up a table to sell their books. Meanwhile, the ANSWER “coalition” has appeared overnight and called for a demonstration the day before the law goes into effect.

As it’s been documented over the years, ANSWER is a front for the Party for Socialism and Liberation, a Leninist group that broke away from the Stalinist line of the Workers World Party a few years back. From where we stand, these groups, who parachute in with their own agenda, offer no answer from any of their party building, paper selling militants, or disingenuous front organizations for the crisis in Arizona.

With the Revolutionary Communist Party (RCP), there are plenty of opportunities for a well meaning person to get caught up in their web of front groups.

Although Morris and (at least the sections he quotes from) his sources don’t discuss it, a similar phenomenon exists with small neo-nazi groups infiltrating the ranks of anti-immigration groups and, some have claimed, tea parties.

Just as the antiwar movement has deflated with the election of supposedly (but not actually) antiwar president Obama, many of the TEA parties have in large part become little else except a vehicle to elect the same old Republicans. As Pat Dixon puts it:

Libertarian Party of Texas Chair Pat Dixon in the Austin Statesman:

I remember when the Iraq war protests began. Protesters would march up Congress Avenue and surround the Capitol announcing their opposition to this war.

As time went on, I noticed how the protests evolved. I would start to see people joining these protests carrying signs opposing capitalism, environmental policy, global trade and all manner of policies that had little to do with the war. I also noticed how angry these people were, and the display of signs that showed President George W. Bush depicted as a Nazi.

When the Libertarian Party of Illinois lit the match that became the tea party bonfire, the idea was to promote the principles of the Libertarian Party in protest of continued growth of government, bailouts, a nightmarish taxation system and other policies promoted by Republicans and Democrats.

It now has evolved to include protesters on immigration policy, gay marriage, foreign policy, abortion and all manner of policies that do not match those of the Libertarian Party. We also see angry signs depicting President Barack Obama as a Nazi.

Movements like these are not easily controlled. They can evolve and splinter such that they no longer reflect their origins. This is also true of the tea party.

As far back as February 2007, discussions on the Libertarian Party of Illinois’ email list mentioned a modern-day Boston Tea Party. In late 2008, the party decided to hold a tax protest called the Chicago Tea Party and scheduled it for tax day, April 15, 2009. In January 2009, they began to promote the event through Meetup groups, Facebook and elsewhere.

Then on Feb. 19, 2009, CNBC commentator Rick Santelli, during a live televised broadcast from the floor of the Chicago Mercantile Exchange, mentioned the idea of a Chicago Tea Party. The broadcast resulted in rapid proliferation of the idea on the Internet, and the event exploded into a mass movement.

It should be noted that the tea party movement started long before the health care debate and while Republicans still controlled the federal government. There was already outrage over the decisions being made in government at federal, state and local levels prior to the swearing in of Barack Obama. At its origin, it was a Libertarian movement. The founders and participants were socially liberal and economically conservative.

Today we have many organizations calling themselves the tea party. There are competing tea parties in several states. The state of this movement today is confusing and uncertain. It has become a prized demographic for talk radio and Republican political groups to romance. It therefore is subject to infusion of those who would coax it toward their opposing ideology.

There is no unified tea party platform. Much of what we see promoted by its presumed leaders is not Libertarian. It has veered in many directions away from its original intent.

The Iraq war protests and the tea party share several attributes. They were both founded with focused concerns. As they grew, they were infused by those with other agendas in order to romance the followers of the movement. They were not centrally controlled, and they diverged into a widening and contradictory set of platform positions that were tangential to the original purpose. The tone became angrier and the messaging more extreme with the use of Nazi labels for their opponents.

What is yet to be determined is whether the tea party will have the same impact as the war protests. My observation is that the war protests don’t appear to have had any significant effect on policy.

Therefore, it is hard to predict how the tea party will influence the November elections. It will depend on whether supporters of the tea party are committed to the Libertarian origin of the movement. If so, votes will go toward those with a Libertarian (socially tolerant, fiscally conservative) platform which challenges incumbent politicians. If not, incumbent politicians will continue imposing anti-free market and socially intolerant policies on us and future generations.

If that happens, the party is over and it won’t matter who lays claim to it. I, for one, won’t want any part of it.

David Nolan wrote at LP blog,

David Nolan at Libertarian Party blog:

When ultra-right Republican Sharron Angle won the GOP primary in Nevada on June 8, a number of Tea Party types were crowing about it, and heralding her victory as a harbinger of things to come. Even some libertarians, who should know better, were proclaiming Angle’s victory as “proof” that liberty lovers should work within the GOP to achieve Freedom in Our Time, or at least nudge us in that direction.

Now, seven weeks later, the smirks are turning into gasps. Angle has proved an incredibly inept campaigner – running away from reporters at her own press conferences, and taking stands that prove her to be far from a consistent friend of liberty.

Angle is good on most economic issues; I’ll give her that. She wants to cut Federal spending, permanently repeal the estate tax, and so on.  But she’s an ultra-hawk in the War on Drugs, saying that she’d like to outlaw alcohol along with the currently illegal drugs like marijuana.  She vehemently opposes a woman’s right to choose whether to continue her pregnancy – even saying that a 13-year-old raped by her father should be denied an abortion because maybe the pregnancy was “God’s plan.”  And predictably, she’s 100% behind our staying enmired in foreign wars until the end of time.

Sharron Angle’s candidacy is a perfect illustration of how the Tea Party movement has in many states devolved from a genuine grassroots liberty movement into a launching pad for right-wing loonies. 16 months ago, there appeared to be a real opportunity to unite everyone who opposes out-of-control government, by avoiding divisive social issues and focusing on taxes and spending. Now, that hope is all but gone. By abandoning a consistent, if limited, advocacy of liberty, the Tea Partiers, at least in Nevada, have blown it, big-time.

So much for the “work within the Republican party” strategy.

Damon Eris has dubbed the Republicanized Tea Partiers as Tea Party Tories, and some Tea Party organizations have explicitly said that non-Republicans need not apply, although not all of them.Many Tea Party Tories have resorted to repeating the urban legend that Ross Perot got Bill Clinton elected. Even if this falsehood were true, what if he had? Would we have been better off with another term of Bush Sr., or an Al Gore presidency? How’s that hope for change thing working out for us, anyway?

Garry Reed explains:

Recently, the Dallas Libertarian Examiner took a road trip down Memory Motorway to the bygone days of newly hatched state Libertarian Parties where its members, fresh from their activist eggshells and still sticky wet, tried to make a few feathers fly by staging tax protest rallies at US post offices across the land.

The article, complete with vintage yellowed photos from the 1970s era Minnesota Libertarian LP newspaper, headlined “Where’s the Libertarian Party tax protest?” complained that the Tea Parties have taken over the once traditionally perennial Libertarian Party tax protests of yore.

But that was then and this is now, and John Jay Myers, the Energizer Bunny of Dallas LP activism, apparently took the article as a personal challenge.

“The Republicans should not have free reign at these Tea Party events to distort their own irresponsibility,” Myers told the Dallas Libertarian Examiner.

The Tea Party, Libertarians contend, has forgotten its anti-tax and anti-big government roots, and is being steered by Republican Party handlers back toward the Neocon fold. They’re forgetting that there’s little difference in the massive multibillion-dollar Bush Iraq war and surge and the multibillion-dollar Obama Afghanistan war and surge.

Reducing taxes and spending begins with ending America’s imperial wars and bringing our troops home.

As Myers puts it, “You don’t have to be a rocket scientist to understand that a huge chunk of our budget is spent on Foreign Policy and DOD.”

In a Green Party press release reaching out to elements of the Tea Party, Rodger Jennings says

Republicans and rightwing ideologues in the media are thrilled with a Tea Party movement that will channel votes and money towards extremist GOP politicians. Their idea of the Tea Party has nothing to do with the 1773 Boston Tea Party. They prefer a movement full of people who would have denounced the original Boston Tea Party as leftist terrorism against the British East India Company. They would have criticized Thomas Jefferson and Thomas Paine for wanting to rein in what Jefferson called ‘the aristocracy of our moneyed corporations.‘* To these Tea Partiers, and to most Republican and Democratic politicians, restraints on corporate power are a symptom of ‘big government.’

In the same press release,

The Green Party has warned that, whether Obamacare is enacted or Republicans succeed in blocking reform, the real winners will be the health insurance, pharmaceutical, and other industry lobbies.

Greens also compared the invasive homeland security measures favored by Republicans and Democrats to the bullying tactics of the British Army and requirement that colonists house British troops on demand.

“We need a Tea Party movement that opposes warrantless surveillance of American citizens, torture, invasion of other countries, and other violations of the US Constitution. [..] We need a Tea Party against predatory private prisons, the war on drugs, and mass incarceration of Americans. We need a Tea Party that defends future generations of Americans rather than corporate polluters,” said Lynne Williams, Green-Independent candidate for Governor of Maine.

“We need a Tea Party that recognizes corporations as artificial entities created by government fiat, and that corporations must not enjoy the same free speech and other constitutional rights as humans.”

The one area where this press release goes astray is in its support for a single payer medical insurance system, although the Greens correctly note that “Greens, like true fiscal conservatives, oppose subsidies for health insurance companies in the Democratic plans, including proposed ‘mandates’ that would require enrollment.” On this point, Roderick Long explains:

Those who see government power and corporate power as being in conflict, and those who seem them as being in cahoots, each have a point. The alliance between government and the corporate elite is like the partnership between church and state in the Middle Ages: each one wants to be the dominant partner, so there’s naturally some pushing and shoving from time to time; but on the other hand the two parties have a common interest in holding down the rest of us, and so the conflict rarely goes too far. The main difference between “left-wing” and “right-wing” versions of statism, as I see it, is that the former generally seek to shift the balance a bit farther in favour of the state (i.e., toward state-socialism) while the latter generally seek to shift the balance a bit farther in favour of corporatism and plutocracy. (In the U.S., the reigning versions of liberalism and conservatism are arguably both more corporatist than state-socialist; but the liberals are still a few notches farther toward state-socialism than the conservatives are.)

But whether the special interests who are the primary beneficiaries of state power are mainly within the state apparatus or mainly outside it, the actual application of state power remains much the same. Hence it is a mistake to suppose that the corporatist-plutocratic version of statism is in any interesting sense less statist than the state-socialist version.

But it is an all-too-common mistake – and this tendency to underestimate the chasm between free markets and corporatism is enormously beneficial to the state, enabling a slick bait-and-switch. When free markets and government grants of privilege to business are conflated, those who are attracted to free markets are easily duped into supporting plutocracy, thus swelling the ranks of statism’s right wing – while those who are turned off by plutocracy are likewise easily duped into opposing free markets, thereby swelling the ranks of statism’s left wing. (These are the two tendencies that Kevin Carson calls “vulgar libertarianism” and “vulgar liberalism,” respectively.)

As one of the villains in The Fountainhead explains in a moment of frankness, talking about the choice Europe was then facing between communism and fascism:

“If you’re sick of one version, we push you in the other. We’ve fixed the coin. Heads – collectivism. Tails – collectivism. Give up your soul to a council – or give it up to a leader. But give it up, give it up, give it up. Offer poison as food and poison as antidote. Go fancy on the trimmings, but hang on to the main objective.

The largely (though not completely) illusory conflict between state-oriented Palpatine and corporate-oriented Dooku in the Star Wars prequels is a nice dramatisation of the same principle.

This dynamic applies in particular to the debate over health care policy. The contrast between, say, the Canadian and American approaches is frequently described – by both sides – as a contrast between a “governmental” or “socialised” system on the one hand, and a “market-based” or “free enterprise” system on the other. But the American health care system bears little resemblance to a free market; instead it represents massive government intervention on behalf of private special interests, from insurance companies to the medical establishment. The choice between the American and Canadian models is simply a choice between different two different flavours of statism – each with somewhat different vices, it’s true (e.g., do you prefer higher prices or longer waits?), but ultimately coming down to a matter of the percentage to which control of your healthcare is exercised by people sitting in government offices as opposed to being exercised by people sitting in governmentally-privileged “private” offices – but in either case by ambitious, avaricious apparatchiks who aren’t you.

So what would a libertarian approach to health care policy look like? At a minimum it would have to include:

1. Repealing laws that have the effect of cartelising the medical industry (e.g., the licensure monopoly granted to the A.M.A.), thus artificially boosting the cost of medical care.

2. Repealing laws that have the effect of rendering the labour market oligopsonistic, thus artificially lowering people’s ability to pay for (and collectively negotiate for) medical care.

3. Repealing laws that shift healthcare funds from the 25%-devoured-by-overhead voluntary sector to the 75%-devoured-by-overhead coercive sector, thus decreasing the amount of healthcare that gets to needy recipients.

4. Repealing laws that transfer the power to make medical decisions for individuals from those individuals to centralised bodies, thus increasing the impact and scope of fatally bad decisions and suppressing the competitive signals that allow the identification of better and worse policies.

5. Repealing laws that wiped out the old mutual-insurance systems (basically HMOs run by the patients instead of by corporations) and empowered insurance companies at the expense of patients.

6. Repealing laws that suppress innovation and distribution in the pharmaceutical industry in the name of “intellectual property.”

Until the unlikely day when the Republican Party embraces this program, let’s hear no more of their favouring a free-market approach to health care.

Getting back to the Tea Parties, they may have reached a new low in absurdity in endorsing proud RomneyCare coauthor and all around RINO Scott Brown over grassroots independent libertarian TEA party candidate “the other” Joe Kennedy. During the closing weeks of the campaign, Kennedy received thousands of pleas from “Brown nosing” Tea Party Tories for Brown (aka BrownBaggers) to withdraw, and at least six threats from BrownShirt thug elements of the BrownBagger brigade. In the end, Kennedy held firm, Brown won anyway, and ObamaCare passed.

In 2000, many libertarians supported George W Bush as the supposed lesser evil who would be a compassionate conservative with a humble foreign policy. Instead, we got two unconstitutional, undeclared wars – at a cost of over a trillion dollars and counting, thousands of Americans dead and many more wounded, perhaps over a million foreign civilians killed (and who knows how many wounded, maimed, raped, made homeless, jailed, beaten, tortured, driven insane…), global ill will, and no end in sight; unprecedented violations of civil liberties; federal spending growing at a faster pace than under any president since FDR; Medicare Part D, No Child’s Behind Left, raids on medical marijuana facilities in states where they are legal, indefinite detentions, 100,000 SWAT raids a year, obscenity prosecutions…in short, the furthest thing from libertarianism on every policy front.

Likewise, in 2008, many libertarians backed Obama because they believed he would bring the troops home, repeal the “patriot act,” equalize marriage rights, end torture, indefinite detention, secret prisons and domestic espionage, make at least some moves towards legalizing marijuana…none of which has happened.

It’s always been clear, but it is more clear now than ever: swinging the pendulum to the left and right just seesaws us deeper towards the pit. Propping up either wing of the duopoly bird of prey is moving us closer to its beak. We need all our freedoms, all the time. It’s not guns vs. butter; a government which gives us more welfare will give us more warfare, and vice versa.

The real atlas that needs to shrug is those of us at the bottom of the pyramid. We have nothing to lose but our ever heavier chains. We can be more prosperous, more equitable, more just and more secure without balancing the pyramid of power on our backs. And we’ll either hang together in this, or soon enough we will indeed be hanging separately.

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Via Kn@ppster and HoT.

Don’t know how to embed that here.

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MPP reports:

Under the direction of acting-administrator Michele Leonhart, the DEA has gone rogue. They are continuing to raid homes and businesses in compliance with state medical marijuana laws in direct opposition to the directive from the Department of Justice. Leonhart has been nominated to take over as head of the DEA

The latest edition of MPP Insider newsletter (via email) says that the Obama-Biden gang is going ahead with the nomination despite MPP’s efforts. This is a kick in the nuts that some very sick and dying people certainly don’t need or deserve.

Thus, one of the very few remaining areas where the Obama regime was supposed to be an improvement over Bush has gone the way of the dodo bird. One can only hope that Leonhart, and everyone involved with her nomination, chokes on their own vomit while receiving irrumatio from a prison guard, after going blind slowly from glaucoma, in a Guantanamo Bay holding cell. Alternatively, for those of you with a more forgiving and religious bent, you may want to pray that God have mercy on their souls.

Every time it looks like Obama has finally done something good, he weasels his way out of it. The more I think about it, the more it seems he really is George W. Bush in disguise.

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Via Red Phillips at IPR comes news that David Duke may be running for president. Disinter may be on board, even though it’s not this David Duke (NSFW) ..LOL

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Some of us thought, during Dubai-ya Bush’s court-appointed reign of error, that there was a high chance he would call off the pretense of elections entirely, and use some (possibly engineered) tragic event to stay in office under “emergency” martial law — the better to avoid war crimes prosecution.

But, I think he stumbled on something even more clever: he went to Mexico, got a tan and some plastic surgery, dropped the fake hillbilly accent and phony dumb cowboy act, and made his way around the pesky problem of the 22nd Amendment to the US Constitution by being elected under a fake name: Barack Obama.

Not only does this explain why his policies are so seamlessly continuous from one term to the next, but it solves the mystery of the “missing” birth certificate that is constantly brought up by the birther nuts – even though he was obviously in fact born in the US. It’s just that he was not born as Barack Obama, but as George W. Bush, son of George H. W. Bush.

Sure, I know how absurd and far-fetched this may sound to some, but can anyone provide a better hypothesis to fit all the observed facts? :-P

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Glad to see Hammer of Truth back on the air.

I’ve been mostly posting at IPR the last couple of years, but I’ve been missing having an active group blog to post about movement news and views that is not related to third parties/independents. Tried to make Next Free Voice into a group blog community after Lost Free Voice went into the toilet, without much success…however, people are still welcome to sign up at NFV if interested.

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Stimulus Spenders and Their Silly Excuses                                         

This past week the government announced that existing home sales plunged 27.2 percent in July while new home sales were down 12.4 percent.  The numbers surprised most “mainstream” economists who expected more modest losses.  Of course, with the housing market still in shambles the value of homes is expected to drop further than the $6 trillion already lost by American homeowners.  This development coupled with continuing high unemployment and low consumer confidence is making many economists predict we are headed for a double-dip recession.

Now, naturally, proponents of the government’s failed stimulus policies have their excuses for why it didn’t work all lined up.  They are not even waiting for the double-dip to officially hit.  They are already claiming that the stimulus wasn’t spent on the right things and was simply “too small” to actually make any difference in “stimulating” the economy.

Here are the facts.  First to address the issue of sinking home sales, no one should be surprised by the numbers.  Home sales are way down for several reasons.  First of all, Obama’s first-time home buyer’s tax credit expired in April.  Folks are now waiting to see if Congress will enact a new credit before they buy.  Second, all the signs are there that housing prices will continue to drop, so why rush into purchasing a property that in a few months might be gotten at an additional discount?  Lastly, given the number of people in America who are unemployed, underemployed, and just downright broke it is no wonder that a huge expense like homeownership is not high on many people’s minds.

So the massive drop in home sales in July should not be surprising.  Anyone who understands human behavior and even the most basic fundamentals of economics knows the president’s housing stimulus program was doomed to failure.  During the time it was effective there was an increase in home sales and a leveling off of home prices, but once the program ended the bottom fell out.  No lasting growth ensued. Additionally, many first time buyers who took advantage of the tax credit used it for a down payment.  Essentially, the government was once again encouraging folks to buy houses who didn’t have the ability to save for a down payment.  This probably represents a misallocation of scarce resources and we can expect to see many of these homebuyers on a list of foreclosures in the future.

But, the president’s homebuyer tax credit is just a small part of the overall massive stimulus Washington has injected into the economy since 2008.  The entire stimulus “invested” by the feds has had a similar effect on the whole economy.  It stabilized things for a while and then wore off.  Because economic priorities are determined by politics and not the free market, we are left with a whole lot of mal-investments and possibly new bubbles.  So when stimulus proponents say the money was not spent on the right things they are technically correct.  After all, stimulus money has been spent on things like converting an abandoned train station into a museum, the development of interactive dance software, new windows for a visitor’s center that closed 3 years ago, and a study to determine the effects of cocaine on monkeys.   If these expenditures are not mal-investments, I don’t know what is.

But this is one reason why government stimuli never work.   Bureaucrats and elected officials don’t operate in a world of profit motives, competition, and the consequences of failure.  Ultimately, the allocation of taxpayer funds is doled out based on what they think is needed and to feather their own nests with the folks back home.  This is obvious given the aforementioned stimulus expenditures.

Besides the stimulus wasn’t spent on the right things argument, proponents of the policy are also saying the government’s effort was not big enough thus rationalizing its failure.  They always only point to the president’s $850 billion program passed by Congress shortly after he took office.  But, there is a lot more that has been “invested” in the economy since the depression began.  Federal spending has included everything from the Troubled Asset Relief Program (TARP) to Cash for Clunkers to GSE mortgage-backed securities purchases by the Fed.  The total of all federal stimulus spending as of December 2009, exceeded $3 trillion!  This represents more than 20 percent of annual gross domestic product.  $3 trillion actually spent and all we have to show for it is sustained high unemployment, sinking home sales, low consumer confidence, foreclosures through the roof, food stamp expenditures at all time highs, and a looming sovereign debt crisis.  The problem is not that we haven’t spent enough.  The problem is that we spent the money in the first place.

At the end of the day, government spending, quantitative easing or whatever the political establishment wants to call it simply doesn’t work.  As economist Robert P. Murphy has written we have a great comparison between the depression of 1920-1921 and the Great Depression of the 1930s to prove this point.  In the former, government cut its budget and the Fed raised interest rates.  The crisis was over within two years.  In the latter, Hoover increased government spending and the Fed slashed rates to all time lows at the time.  The result was the beginning of 15 years of economic misery.  Given the amount we have spent this time, get ready for a long rocky economic ride. 

Article first published as Stimulus Spenders and Their Silly Excuses on Blogcritics.

Kenn Jacobine teaches internationally and maintains a summer residence in North Carolina

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Lies, Intolerance, and Disrespect for the Rule of Law             

President Obama was absolutely correct last week when he proclaimed that the Cordoba Initiative, under the Constitution, had “the right to build a place of worship and a community center on private property in lower Manhattan, in accordance with local laws and ordinances.”  Of course the president’s remarks set off a firestorm of responses from Republicans looking to capitalize on the issue in this election year.  Sen. John Cornyn (R-Texas), chairman of the National Republican Senatorial Committee, told “Fox News Sunday” that Mr. Obama’s view “demonstrates that Washington, the White House, the administration, the president himself seems to be disconnected from the mainstream of America.”  Former House Speaker and potential Republican presidential candidate in 2012 Newt Gingrich said on his website last month simply “No mosque.”  Lastly, of course, the Jesse Jackson of 21st Century political America Sarah Palin wrote in a Facebook message originally posted July 20 – “Many Americans, myself included, feel it would be an intolerable and tragic mistake to allow such a project … to go forward on such hallowed ground.”  These remarks and others like them represent what is so wrong in America today – deceit, intolerance, and disrespect for the rule of law.

In the first place, Palin is stretching the truth by using the “hallowed ground” rationale. The proposed site of the mosque is several blocks from Ground Zero and would be surrounded by a store offering lingerie, a peep show, and sex toys, at least 11 bars, and a strip club.  Calling this neighborhood “Hallowed Ground” is like attaching the same nomenclature to the Strip in Las Vegas.  Given the current makeup of the area, a mosque would add a spiritual influence to its fabric and actually make the district more “hallowed”.  In any event, Palin’s statement, like many uttered by our politicians today, is misleading and has certainly led many Americans to a false opinion of whether the mosque should be built.  

Newt on the other hand employs direct intolerance in his opposition to the mosque project.  “No mosque” leaves little room for negotiation.  How can someone who possibly aspires to be president be so vehemently discriminatory?  Since there are already 10 churches and 3 synagogues in lower Manhattan near the Ground Zero site, a mosque would actually enhance the diversity of that community.  Additionally, these are times when people of different faiths should come together to solve problems and be role models of tolerance and cooperation.  I can imagine no greater tribute to those lost on September 11, 2001 than for the churches, synagogues, and mosques near Ground Zero to work together on projects that promote understanding and peace.  With Newt’s thinking this won’t be possible.

Lastly, Senator Cornyn should know that property rights under the Constitution are not a popularity contest.  Just because a majority of Americans hold a certain opinion, in this case that the mosque should not be built in Lower Manhattan, it does not mean it is the law.  The Constitution specifically grants all Americans equal protection under the law and protects us against deprivation of life, liberty, or property without due process of law.  The builders of the mosque have broken no laws and are entitled to the same justice as churches and synagogues.  Thus, they have a right to build their place of worship on their property.  Cornyn’s inference is dangerous because it violates the Constitution by making mob rule king and minority rights arbitrary at the whim of the mob.  At a time when property rights are already under attack from both courts and policymakers, all Americans should stand with the Cordoba Initiative in support of its property rights.  By doing so, they may be defending a future attack on their own.

The debate over the so called “Ground Zero Mosque” is representative of the lies, intolerance, and disrespect for the rule of law which has become so pervasive in American society.  To gain an upper hand in a campaign politicians lie.  We see this all the time in campaigns where candidates have lied about their opponent or themselves.  We have become intolerant by labeling those we don’t agree with “racist”.  More ominously, we have become a society averse to the rule of law, by condoning leaders who lie under oath, lie to start wars and invade sovereign nations unprovoked.  Instead of chastising the president for defending the Constitution, it would have been refreshing if Cornyn, Palin, Gingrich, and others who claim to support the same document, would have come out in support of the president’s position.  Perhaps in America’s current environment this is too much to ask?

Article first published as Lies, Intolerance, and Disrespect for the Rule of Law on Blogcritics.

Kenn Jacobine teaches internationally and maintains a summer residence in North Carolina

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Tocqueville as Prophet                                                                               August 13, 2010

“The American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money.”

Alexis De Tocqueville, Democracy in America (1835)

Last week the economic central planners at the Federal Open Market Committee (FOMC) of the Federal Reserve Bank issued a statement tempering their previously optimistic forecast for recovery from the “Great Recession”.  In its statement, the Ben Bernanke led FOMC indicated that the weakening recovery has made it necessary for the Fed to keep interest rates at “exceptionally low levels…for an extended period”.  Additionally, the FOMC stated it will change course.  Instead of shrinking its historic $2 trillion balance sheet, the Fed will reinvest money from maturing mortgage bonds to buy up more assets (notably government treasury bonds).  All of this will be done in an effort to further stimulate the markets to recovery.

No one doubts that something needs to be done to reverse the downward spiral that our economy is once again taking.  After all, consumer confidence is down, factory orders are down, the real unemployment rate which takes into account discouraged and underemployed workers is still north of 16 percent, Food stamp usage has skyrocketed to a record high of 40.2 million recipients, and  Bank repossessions and foreclosures are still a massive problem.  No, nobody doubts that something needs to be done, but that something should not be more of the same that got us into this mess in the first place and is keeping us in it in the second.

Now, I would not question the intelligence of anybody on the FOMC.  Bernanke and his comrades are smart folks.  They all have fancy degrees and have spent years on Wall Street and/or in the government cutting their teeth becoming seasoned economists and financiers.  They certainly are not “wet behind the ears” as is said in the business.  So then if it is not mental ability maybe it is motives that drive the FOMC members to pursue what appear to the reasonable layman as an insane policy.  Let’s analyze the situation further by looking at historical examples.

Faced with double digit inflation and an unemployment rate of 11-12 percent in the early 1980’s, then Fed chairman Paul Volcker did exactly the opposite of what our current Fed commander has done.  He raised money market rates to 19 percent.  It was painful at first, but in the long run the policy broke the decade long grip that stagflation had on our economy and ushered in a decade of solid economic growth.

Then we can point to Japan’s horrible experience with “quantitative easing” in the 1990’s as another example for objecting to the FOMC’s lamebrain policy.  Japan’s financial meltdown in the early 1990’s like ours this time was caused by government induced easy money and real estate speculation.  Once the bubble popped the Japanese powers that be pursued a policy of massive fiscal stimuli, propping up of insolvent banks, and discriminatory credit allowances. Sound familiar?  All in all, in the decade of the 1990s Japan passed 10 fiscal stimulus packages worth more than 100 trillion yen.  Instead of curing its economic ills the spendthrift policy led to what is now known as the “Lost Decade” in Japan.  In fact, many economists claim Japan has still not recovered.

Of course, Bernanke will make up excuses why the same policy he is pursuing for the U.S. didn’t work for Japan but will work for us.  Actually, all he really has to do is reference noted Keynesian economist Paul Krugman who says both Japan in the 1990s and the U.S. today simply did/have not spent enough to stimulate their respective economies.  Unfortunately for Bernanke at least two of his underlings don’t buy the argument.  In March of 2009 Timothy Kehoe, Edward Prescott of the Minneapolis Fed and a team of 24 economists from around the world published a report indicating that it is the “overreaction” by government which “prolongs” and “deepens” economic downturns.  In fact, if you look at the three crisis in the last 100 years where government has overreacted the most (the Great Depression, Japan’s Lost Decade, and our current crisis) they are also the longest lasting.  This is a fact that seems to solidify Kehoe and Prescott’s conclusion.

Lastly, the U.S. government has tried quantitative easing and Keynesian economics to solve our most recent troubles for close to 3 years now.  When the “Great Recession” began in December 2008 the national debt was a little over $9 trillion.  As I write this article, our debt is more than $13.3 trillion.  And this doesn’t count the trillions of dollars in easy credit doled out by the Fed to induce banks to loan again.  The longevity and size of the effort can only make one wonder about the motives of the FOMC to pursue more of the same.  Could it be that we are missing some information only available to the Fed?  Or could it be that Tocqueville was correct when he prophesized that Congress would discover that it can bribe the public with the public’s money.  We are talking about the Federal Reserve but who chartered the Fed and refuses to audit its books – Congress.  What’s unknown, given our current circumstances, is how much longer our republic can endure?           

Article first published as Tocqueville as Prophet on Blogcritics

Kenn Jacobine teaches internationally and maintains a summer residence in North Carolina

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